Some of the 16 are not trash, at least in my mind. For example, nearly all property managers charge application fees, which they use to pay for credit reports and criminal background checks. But the charges slide into garbage territory when they are non-refundable and are completely over the line when the reports can’t be used to apply at other properties.
Mind-Boggling Fees
The NCLC also found some add-ons that boggle the mind, including convenience fees, roommate fees and processing fees. In one instance, landlords charged a “January” fee for no other apparent reason than it was the first month of the new year.
It’s all about finding ways to monetize whatever landlords can get away with. For instance, one Tampa firm sends invoices for sub-metered water and sewer service. Nothing underhanded there. Most places charge for utilities. But it also charged a billing fee and a meter reading fee.
Tenants were dunned electronically, not with a more expensive snail-mail process. So, landlords can’t gripe about the extra cost of paper and postage. But no matter how the invoice was delivered, why should anyone have to pay to be billed? How can you pay without a bill?
The extra charges amounted to only a few bucks. But multiply that by each tenant annually, and you end up with a nice little profit center. But pure and simple, these are costs of doing business that should be borne by the property owner, not his tenants.
Speaking of utilities, one major landlord came under fire last month for stripping utilities out of its rental rates and charging by occupancy rather than usage. Under that system, why should tenants care about saving energy?
Elsewhere, a Kansas City property demands a $200 one-time fee for pets — plus $15 a month. Nothing unusual there; most places charge for cats and dogs. But this place also charges for fish. Not only that, but it also lists them as “aggressive” breeds. Even goldfish!
I am informed that the real worry isn’t the fish but water damage from the tank, so maybe the fee isn’t all that outlandish. But other owners are looking to save money by operating their properties without any on-site personnel. No resident manager, no maintenance people, no security staffers. One outfit reportedly already operates unstaffed properties and plans to push that number to 35-40 by year’s end.
Unnecessary Fees
The Law Center report comes in the wake of an “open letter” from HUD Secretary Fudge, who called on the housing industry to address such fees, charges she said raise costs and hit vulnerable people the hardest.
“Many renters today face fees that are hidden, duplicative and unnecessary,” Fudge wrote. “These fees limit options for renters and strain household budgets, particularly for renters with low and moderate incomes who already face high rental cost burdens.”
In particular, the HUD secretary cited non-refundable application fees, which she said can run into hundreds or even thousands of dollars for tenants applying to multiple places. She also noted that the credit reports for which applicants pay often have inaccurate information and are of questionable validity in predicting renter behavior.
Fudge also mentioned such “hidden fees” as move-in charges, late charges, high-risk fees, security bonds and convenience fees for tenants who pay their rent online. But the Law Center went further, noting that the vast majority of landlords impose excessive late fees, and more than half charge other bogus fees.
Watch it on The Interest: Builder Sentiment Optimistic
To compile its list, the Washington, D.C.-based nonprofit surveyed legal services and non-profit attorneys about the types of fees they have seen. The survey period was in November and December last year.
Of the 95 responses from 26 states and the District, nearly nine out of 10 said landlords collect application fees. And almost three out of four said they had seen utility-related charges.
So far, not totally dubious. But 87% said landlords also impose excessive late charges. Moreover, 68% have seen processing or administrative fees, 60% noticed convenience fees, 59% reported seeing insurance fees, and 56% saw notice fees.
Seven percent reported seeing fees to report on-time rent payments to credit bureaus. And the aforementioned January fee was reported by two Minnesota advocates, “seemingly for no reason,” the survey said.